Whether we personally are trying to save up for a house, we know friends who have moved from Los Angeles because of the cost of living, or we know those who are trying to survive month to month, we all feel the pressure of the housing crisis in Los Angeles. It seems like everyone is affected.
In the most recent Bisnow conference in DTLA, the state of the office and housing market was the topic of conversation. As many of the LA business people gathered, the issue in Los Angeles of rising construction costs (a 113% increase in the last 3 years), the limited space for affordable housing, the ongoing parking dilemma (more cars in LA than any other U.S city), and the issue of wages not keeping up with market values (tenants need to earn $47.52/hr to afford medium asking prices) sparked conversation around a housing problem that doesn’t seem to have a quick solution.
Bob Champion, Founder and CEO of Champion Real Estate Company, explained, “California falls short on average of 150,000-200,000 units per year. This means that Los Angeles has to create 2.2 million units just to catch up with the demand.”
In addition to the general short fall, the city is still waiting for the 10,000 affordable units it intended through proposition HHH. According to a recent report from the California housing partnership, Los Angeles needs 516,946 affordable units to just meet the demand of low-income housing.
If that wasn’t bad enough, a current prediction shows a slow in employment growth in LA over the next couple of years.
However, despite the outlook, most don’t foresee a slow down of developing in Los Angeles anytime soon. For the areas where businesses are creating a demand for housing, space may become the only issue.
The conclusion: Los Angeles will continue to sprawl into neighboring regions as businesses, schools, and production companies look elsewhere for space. And because of this, the people will follow.
So although Los Angeles will continue to be a highly transient city, there is potential to impact the community we find ourselves. As Victor MacFarlane, CEO of MacFarlane Partners and current developer in DTLA eloquently put it, “building projects have the potential to create a center of gravity to change a neighborhood.” Given the fact that the housing problem in Los Angeles isn’t changing soon, the question remains how we together can create these places of center of gravity to love our neighborhoods and respond to those being affected by the crisis.